4 ways to 'work the system' with an HSA Skip to content

4 ways to 'work the system' with an HSA

An HSA is a great complement to a high-deductible health plan, especially when factoring in tax savings and other advantages. In addition, savvy users can take advantage of some creative ways to maximize HSA benefits even more through these easy-to-follow tips:

1. Save now, cash in later

The concept of “save now, cash in later” is a great advantage to having an HSA. HSA owners can pay for qualified medical expenses out of pocket and then reimburse themselves at a later date. As long as they keep the receipts and can prove the cost was a qualified medical expense, they can reimburse themselves from their HSA even years after paying the initial medical bill.

2. Credit card reward points

HSA owners can pay for their qualified medical expenses with a credit card that has cash back points, airline miles or other perks and then reimburse themselves from their HSA for those expenses. This can be a great way to “work the system” and get credit card perks as long as the medical expense was incurred while the HSA was open.

Remember that if a credit card is used to cover medical expenses there may be interest charged if the balance is not repaid on time. If used properly though, this can be a great way to get benefits from a credit card for expenses that have to be paid anyway.

3. Massages with a doctor’s note of necessity

Sometimes, a massage is much more than a therapy for stress relief. Therapeutic massages can help people deal with depression, pain and other medical ailments. In certain cases, the massage is deemed medically necessary, and can be classified as a qualified medical expense. In a case like this, accountholders can use their HSA to pay for the massage. For you to use your HSA to pay for the massage, you must provide a letter of medical necessity from your doctor that therapeutic message is really needed.1 Talk to your doctor if you think this situation could apply to you.2

4. COBRA premiums between jobs

COBRA (Consolidated Omnibus Budget Reconciliation Act) is a program that allows those who lose their jobs to continue coverage under their previous employer-sponsored medical plan until they secure coverage elsewhere.

If an HSA owner enrolls in COBRA benefits, they can use their HSA to pay COBRA premiums during unemployment. And if the COBRA plan is an HSA-qualified plan, they can continue to make contributions to the HSA.

Make sure that COBRA coverage is the best option. If the medical costs would surpass the premiums and deductible based on your coverage, it might make sense to buy COBRA. If not, using your HSA to just pay out-of-pocket could make more sense. You typically have 90 days to retroactively elect COBRA coverage so it could make sense to wait until you have more information. This is the best way to “work the system” if you find yourself needing to enroll in COBRA and you have an HSA.


These practical tips can make an HSA - something that is already highly advantaged - even more useful. HSAs already boast impressive features, but these are a few ways to squeeze out even more benefits.

1 It is the member’s responsibility to ensure eligibility requirements as well as if they are eligible for the plan and expenses submitted. One should consult a tax advisor as individual factors and situations vary.

2 HealthEquity does not provide legal, tax, financial or medical advice.

Nothing in this communication is intended as legal, tax, financial, or medical advice. Always consult a professional when making life-changing decisions.

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